Deregulation Of The USArline Industry In The 1970s

Whereas from a liberal perspective states and people can cooperate for mutual benefit (positive sum game), from a realist/economic nationalist perspective the state must look after its own interests. Realist governments play the zero-sum game, where one states gain is another ones loss.This is done because of the potential threat of the sum of free trade being negative for their own nation. By engaging in this form of protectionism governments are seeking an outcome of hegemony from free trade.

From a realist perspective the economic policy of a government must at all times be aimed at increasing the state's power. The government is to be the main actor in in both domestic and international domains. But what does this perspective imply for the deregulation of the US airline industry in the 1970s? How could the state maximize its power in both domestic and international domains of the airline industry?

The regulations in the airline industries had proven to cause several domestic market problems such as monopolistic practices and inflating ticket prices. Although the airliners could still compete in the US due to the monopolies, on an international level the US airliners could only compete by offering more sumptuous meals, which would surely not be sufficient in the future.

Although from a realist perspective market based actors such as firms should be subordinate to the state, the firms in the airline industry had grown very powerful despite the government regulations. Realists would have argued that the US government had been too weak and soft in the US airline industry. There would be two possible solutions for a realist for the